Business update on the situation around the Covid-19 pandemic

Business update on the situation around the Covid-19 pandemic

  • Net sales and profitability in third quarter of 2019/20 declining due to crisis, free cash flow significantly higher than in previous year
  • Solid balance sheet and comprehensive financing facilities
  • Comprehensive crisis management implemented; focus on health and safety of employees, on maintaining supply chains and focus on cash
  • Consistent continuation of strategy with well-chosen investments despite Covid-19 crisis
  • Low visibility on the further course of business

The impacts of the Covid-19 pandemic unfavorably affected sales development of dormakaba in the third quarter of 2019/20 (January – March 2020). Organic sales declined at Group level around 3% compared with the same quarter of the previous year, mainly because of weak business in China in February and March 2020.

The EBITDA margin in the third quarter of 2019/20 was around 150 basis points lower than the year-back figure, though swift and strict cost control supported profitability despite lower volume. dormakaba generated free cash flow of around CHF 80 million during the period under review, up from around CHF 40 million compared with the same quarter of the previous year.

Comprehensive crisis management

dormakaba was early to implement a comprehensive crisis management strategy. The aim is to ensure the health and safety of all employees and at the same time to minimize the impact on business operations and supply chains, and thus on customers. In parallel with this, dormakaba has adjusted its financial management in order to retain its entrepreneurial flexibility at all times even during the Covid-19 crisis. dormakaba has a solid balance sheet as well as large undrawn committed credit lines from international banks. This includes a syndicated loan facility of CHF 500 million with options to increase the amount and extend the expiry date.

Also, previously approved investments and projects have been reassessed and adjusted. Further measures include reduction in overtime and vacation days, a significant reduction in temporary workers, a far-reaching hiring freeze and the gradual introduction of short-time work in selected countries.

In order to send out a signal of solidarity with all employees during this crisis, the Board of Directors, Executive Committee and Senior Management of dormakaba have agreed to take a voluntary and temporary 10% cut in their monthly base salary.

“I am very impressed with the way our employees continue to keep our business going despite all the current restrictions. I am very grateful,” says Riet Cadonau, Chairman and CEO of dormakaba. And he continues: “Our culture, our operating model and our financial stability provide a solid basis for coping with the current Covid-19 crisis. Owing to the significant impacts, however, we expect to have to initiate further cost-saving measures to navigate our company safely through this extraordinary time.”

Consistent implementation of the strategy

Since the merger to form dormakaba in September 2015, the company’s risk profile has improved significantly; dormakaba has gained scale, while remaining financially flexible and noticeably diversifying its product portfolio and local presence. This enables the company to continue to execute its strategy consistently even during the current crisis and thus creating a solid basis for its competitiveness and sustainable profitable growth in the post-crisis period. This includes consistently continuing to invest in innovation and digital transformation and after the crisis also in the ongoing consolidation of the industry, which is likely to accelerate.


At the moment, the future development of the economy and the impact of the Covid-19 pandemic on our business cannot be predicted. While the situation in China has stabilized and both production and local demand have already returned to a satisfactory level there, we have seen increasing unfavorable effects in North and South America and in parts of Asia and Europe since the second half of March. In countries that are important for our business, the lockdown and associated restrictions have led to the temporary closure of production sites and have prompted customers to delay and postpone projects.

Owing to uncertainties about the severity and length of the Covid-19 pandemic and the resulting lower visibility about the future course of business, dormakaba is withdrawing its previous guidance and will not be making any more financial forecasts for the current 2019/20 financial year. The next announcement about the company’s business performance is scheduled for the publication of the full-year results for 2019/20.

Depending on how the Covid-19 crisis plays out, cost structures may need to be further adapted to the new market situation in all segments. Plans are being prepared accordingly and the decision whether or not to implement them will largely depend on how business develops in the weeks to come. These measures may involve one-off and extraordinary restructuring costs.

Download media release (PDF) dormakaba_MediaRelease_BusinessUpdate_080520.pdf - 43 KB
Siegfried Schwirzer
Siegfried Schwirzer Head of Investor Relations
Martin Bahnmueller
Martin Bahnmueller DVP Group Communications / Press Officer Group
Ad hoc dormakaba News
About dormakaba

dormakaba is a leading global provider in the access solutions market. The company reimagines access by setting industry standards for smart systems and sustainable solutions across the lifecycle of a building. Around 16,000 employees worldwide provide their expertise to a growing customer base in more than 130 countries.